Do You Need Insurance If You Don't Own a Car?

By Cars & Vehicles Last updated Wednesday, April/17/2024

Is Insurance Required?

In order to take a driver's test, all states require a driver to have insurance. The driver may be covered under another's policy or bond, but it is a requirement. The license bureau may deny an individual from taking a driving test if she does not show proof of insurance. Not having insurance is illegal, and punishable in a court of law.

If the owner of a car gives a non-policy or uninsured individual permission to operate a car, some insurance companies may cover the damage. Not all insurance companies extend this courtesy to their policy members, so it is wise to check with the insurer before driving the vehicle. However, any accidents caused by the uninsured driver can cause the premium for the insured individual to rise as a result.

Those licensed drivers who do not own cars may purchase a driving bond, or a non-owners insurance policy. This bond and policy is for the driver who does not own a vehicle but occasionally drives. These policies usually cover liability, medical payments, and uninsured motorist coverage. However, non-owners policies or insurance bonds do not cover collision damages, rental reimbursement coverage or tow reimbursement.

Families have insurance policies that cover everyone listed in their home that has a valid driver's license. The individuals named on the policy do not have to own a car to be on the policy. In other words, all individuals on the policy are covered while driving any car on the policy. If a driver drives a car not listed on the family policy, he or she is not insured to drive that vehicle, unless the policy states otherwise.

When renting a car, a licensed driver who does not have insurance will have to purchase insurance from the rental car company. This can be very costly, but rental car companies will not allow a driver to take their cars off the property without insurance. However, those drivers who rent cars with a major credit card may not have to purchase renter's insurance, depending on the type of credit card used and their policies. Some major credit card companies provide auto insurance on car rentals as a perk for their customers.